Tuesday, July 30, 2013

Politics Short on Facts About Adam Smith

1. “In [Wealth Of
Nations] this much heralded treatise which, happily, is still on the reading
list in most college economics classes, Smith sets forth an explanation and
defense of the principles of capitalism. …

2. “What produces
groceries is Smith’s idea of a free citizen growing food in his privately owned
field and selling it to a willing buyer. Another free citizen down the road
does the same thing. Buyers of food will go to the citizen whose product and
price they like. Competition will incline the two sellers to improve their
product and their price. Such unfettered economic practice of free people Adam
Smith referred to as “the Invisible Hand.” …

3. "Not so incidentally,
the full title of Adam Smith’s work was “An Inquiry into the Nature and Causes
of the Wealth of Nations.” It was not propaganda for capitalists, but a sincere
examination by a humble professor of moral philosophy who desired that all
people prosper. It was first published in 1776 and was embraced by a brave and
honorable group of nation builders 3,000 miles away from Smith’s native
Scotland.”

Comment

In the rest of the
article, Roger Hines, indulges in a knock about style attacking “socialists” in
the USA, who apparently dominate the universities and public life, including
the thinking of the President, on which politics I abstain, as regular readers
will know, of not intervening or commenting on the politics of countries that I
do not vote in.This is a self
denying ordinance that limits me to commenting only on the country in which I
do vote, namely, Scotland, presently part of the United Kingdom of Great
Britain and Northern Ireland.To
read his anti-socialist views, follow the link above. Taking the extracts of
Roger Hines’s views that I selected above and upon which I choose comment, I
shall say the following”

1. Adam Smith’s
“Inquiry into the Nature and Causes of the Wealth of Nations” may be on the
reading lists of most college
economics classes” but I doubt if very many students read it through.And, I add, very few of the tutors, including
the professors, will have read WN either.

2.
A somewhat stylised assumption of the nature of private property in farmers’
fields known to Smith in the 18th century.Through his widowed mother’s family, the young Smith
would have known her family’s circumstances, as they were fairly major farmers
just outside Kirkcaldy where he lived from his birth until he was 14 and went
to Glasgow University.

Most
of Scotland was owned by major titled landowners, who held feudal titles based
of primogeniture and entails, with feudal titles as court-favoured dignitaries
with electoral rights to vote. Some of them leased their lands to sub-tenants
who farmed on their own account.Their produce net of their own subsistence and that of those working for
them, would supply food products to the inhabitants of small towns nearby.In turn they would buy products in
nearby towns and labour services from artisans and merchants importers of
foreign products, Some landowners would also invest in other products of their
lands, such as the minerals they mined. Coal was relatively significant in Fife
at the time, (as was iron ore, etc., for smelting).Farming required products processed in small workshops of
individual artisans, and related agricultural products such as wool, linen,
leather and such like.

The notion of “free
citizens” engaging in trade is idealistic.What they could manufacture was governed by laws and
regulations imposed locally by privileged guilds of artisans and merchants.

The “unfettered economic practice of free people” was
not quite as rosy a picture as Roger Hines imagines. And Adam Smith was very
well aware of that circumstance and wrote much criticizing the absence of what
Roger Hines imagines was the case in Smith’s time.

3. His claim that Adam
Smith referred to “free trade” as “the Invisible Hand” is absolutely and
categorically untrue and more a testament to the gullibility of modern
economists of the neo-classical school.

Roger Hines’s
peroration is summed by his asserting that Wealth Of Nations “was not
propaganda for capitalists”.At least we can agree on that.